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COVID-19 and Supply Chains: Change the Strategy, not the Goal

Ashish Tripathi
4th May, 2020

COVID-19 has disrupted global supply chains is an understatement. However, in a refreshing departure, a number of supply chain heads have freely shared their experiences and learnings on the crisis. This is a crisis in progress. We bring you one more such sharing – Ashish Tripathi, Head of Strategic Sourcing, Logistics & Agency TORM shares how TORM has managed to weather the storm.

Ashish Tripathi,
Head of Strategic Sourcing,
Logistics & Agency TORM

During the last few weeks we have experienced situations like never before in our lifetime and that goes both ways personally and professionally. More so, if you are from Supply chain, irrespective of nature of business. We have been hearing about the impact on Micro and Macro Economic situations due to COVID- 19, with economists drawing comparisons to the Great Depression of the 1930s.In addition, how can we forget about224,000lives this demon has taken and 3.1 million people globally infected, with no remedy in sight soon.

Worrying part of the story for me remains that even after so many drastic measures taken by governments, businesses and even on individual capacity to slowdown virus, we are yet to control the pandemic.

Worrying part of the story for me remains that even after so many drastic measures taken by governments, businesses and even on individual capacity to slowdown virus, we are yet to control the pandemic. The fact remains the economy is getting weaker, unemployment is on rise across sectors, and the virus continues to throw newer challenges with latest being countries like Singapore going back to lockdown post opening up gradually.

For any supply-chain set up this has caused massive disruption but the magnitude of it can be gauged by understanding two important parameters which is handy always to assess the damage

  1. Region(s)affected
  2. Extent/Scope

The world has witnessed many disruptions in the past, like the 2011 flood in Thailand dealing a blow to electronic and HDD industry or massive wildfires in Australia recently. No one should discount the fact that these natural disasters caused suffering for life and business both. However, the positive side to this was the extent of damage it caused due to resilient supply chains; firms could overcome these shocks by sharing resources from neighbouring states/countries or turning to different sourcing destinations or via various other methods.

Challenge with COVID-19 is its sheer exposure globally and industries it affected, not just goods but services too.

Challenge with COVID-19 is its sheer exposure globally and industries it affected, not just goods but services too. Panic buying, we witnessed for toilet papers, to cancellation of Indian Premier League or Olympics, Aviation, hospitality and the list of affected goes on…


Let’s talk Business:

To set ball rolling, I am listing type of ships in very basic terms so that we are clear about type of ships, or rather vessels as we call in our lingo. I am talking about and what is it that is keeping my team engaged enough to enjoy this once in a lifetime situation and yet ensuring deliveries of spares, MRO items, provision, arranging services or even getting them down from ship wherever possible.

So, pardon me for layman’s explanation, as it is for someone confused about types of vessels. It’s all in the name if you break it down.

Container Ships – Carrying 20-40ftpackaged container, which you often see on trailer, stuffed with anything right from toys to furniture and so on

Bulk Carrier: Carrying cargo in bulk and loose with likes of ores, grains, or even cement

Tanker Ships: Transports LPG, LNG, crude oil or by products, Veg oil, Aviation Turbine fuel etc.

Cruise Ships: You know them

Offshore Ships: Employed for oil exploration or closer to upstream

We have had excellent overview of goods through our ERP system located globally and ensure seamless movement of them with the help of our preferred 3PL partner Wrist Marine Logistics.

This I am addressing specifically for my segment of business in Supply chain i.e. Procurement/Sourcing for Ocean going, globally plying, tanker ship for which schedules of port to be called aren’t as robust as for a Cruise Liner or Container Carrier making supply chain more demanding and strenuous.

I am sure there would be various measures that each one of us would have employed at Leadership levels to overcome this challenging time depending on if you are seller or manufacturer or you have deep ties with sourcing in China.

Below is a sneak peek on the action plan we employed to mitigate the risks due to COVID-19 and are still overcoming them as we speak

1- Knowing your key suppliers/categories and extent of exposure

Mistake which most of do in identifying key suppliers or critical direct/indirect categories is that we go only by dollar value in our spend. However, that approach according to me, is skewed. The reason is that criticality of an equipment especially in an engineering set up cannot be defined only by spend, so involve your stakeholders to arrive on that “Key Supplier List.”

 Try to find out about their sub-suppliers, warehouses, factories. In current scenario you are forecasting for spares consumption should be close to reality, share it with them to schedule their MRP so they have better picture of markets. Next time you engage with them for contract negotiation think both ways to make it really Win-Win.

2- Assessing Impact on your Supply Chain

The challenging bit for us remains the last mile like in any set up of supply chain. We assessed the local port implications with the help of our Global Service provider -Inchcape Shipping Services who kept us abreast with updates on statutory requirements for spares, connection, or crew change or any slightest of details which could speed fast planned operations.

3- Start to Mitigate

We don’t call it Supply chain watch tower, but it is one which we had already in place to ensure each and every operation was planned to ensure minimum risks and maximum win. We have had excellent overview of goods through our ERP system located globally and ensure seamless movement of them with the help of our preferred 3PL partner Wrist Marine Logistics.

4- Relations with your Suppliers and 3rd Party Agents

This of course cannot be quantified neither it can be built over night. With my little exposure to orchestrate this part of the business, what I have realised is that it can create wonders for business and sometimes deliver results you cannot imagine– both as per your own calculations or by previous experience.

Only way for me to assess this would be that when your supplier/agent talks to anyone else outside your organisation, she should be as good as representing you but not on your payroll.

5- Safety of People

There is no doubt safety is of utmost importance currently. We support safety measures by maintaining inventory of COVID PPE kits globally at key ports or by ensuring screening of 3rd party visitors on board. Any sort of injury during normal times is difficult. However, in current challenging times it could be very taxing to both crew on-board as well as people ashore ensuring best assistance possible.

I have a very strong feeling like any Marvel movie, we will overcome this and emerge as winner at the end. At last will end with a profound quote by Shri Krishna “If you fail to achieve your goal, change the strategy, not the goal.” ♦♦♦♦♦

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